When Age Matters: How the Business Life Cycle Impacts Sales Pay Mix

Posted by Chad Albrecht on Wed, Nov 06, 2013

Within the last month, I have been asked three different times how a company’s business maturity impacts the pay mix and how we should benchmark to the market at each phase. While it is quite common to get questions on how the incentive plan should be structured based on a company’s "age," it’s unusual to get a question on pay mix—let alone three. Given that, I thought I would provide my point of view on the topic in case others are facing the same question.


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"That’s Not Fair!" Psychology and the Evolution of Sales Compensation

Posted by Chad Albrecht on Wed, Oct 02, 2013

Capuchin monkeys are starkly averse to inequity, according to a 2003 study. When offered a cucumber slice for doing a task, 95% of monkeys completed it. But when some monkeys were offered a more appealing reward, a grape, the percentage willing to perform the task for a cucumber slice dropped to 60%. And when one group received grapes for doing less or no work, the fraction of monkeys willing to do the task for cucumbers dropped to 20%.

The experiment can teach us something about human behavior—or more importantly human sales behavior: When incentive compensation is unfair (or judged as such), the sales force’s motivation shrivels up.


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How to Spot Sales Comp Dangers—Before They Surface

Posted by Chad Albrecht on Tue, Sep 03, 2013

When I hit 40, I was reminded that this was the magical age in which annual doctor checkups were now recommended. “Why?” I thought, “I feel fine.” During the checkup, my doctor found elevated cholesterol and slightly elevated blood pressure—“silent killers” that are easily treatable but dangerous if left untreated.

And so it goes with sales compensation. Sadly, most companies don’t get a checkup on their incentive plan until it goes untreated so long that serious symptoms rise to the surface.


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Think (Daniel) Pink: Does Provocative Motivation Study Apply to Sales?

Posted by Chad Albrecht on Wed, Jul 31, 2013

Three things motivate human beings: autonomy in your role, mastery of your domain area, and purpose. This according to Daniel Pink in his 2009 book, Drive: The Surprising Truth About What Motivates Us. Pink derives these conclusions from multiple motivation studies and dramatically simplifying them for non-academic consumption.

What doesn’t motivate, says Pink? Monetary incentives. Sure, they may work in very simple tasks but not for anything requiring significant cognitive abilities. For those, we look to autonomy, mastery and purpose.


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Empowering Your Reps to Solve the Sales Quota Dilemma

Posted by Chad Albrecht on Tue, Jul 09, 2013

A dilemma is a situation that offers two possibilities, neither appealing. Enter the unachievable sales forecast/quota dilemma. Mission Impossible, right? Not if we turn the question around on individual salespeople.

Over the past five years, a large number of sales compensation leaders have asked what to do when facing an unachievable forecast they are supposed to allocate out to their salespeople in the form of sales quotas.


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